Flipping is a business that requires hard work. This includes engineering and architectural skills, as well as investment and financial strategy. And there are many types of houses. A house, bungalow, cottage, townhouse, condominium, mansion, hut to name a few. For sure one of these is where you are currently staying.
But there are also what are called uncommon house renovations. This is where house flippers would turn a totally different object into a house. This still requires engineering and architectural expertise. But this kind of renovation also requires creativity, artistry, and unlimited imagination.
House flipping is a type of real estate investment
This is a strategy in which investors would buy a property not to use it but to sell it and get a profit out of it. The profit comes from price appreciation resulting from the real estate market. An investor will buy a home, make large renovations, and then offer it at a price that reflects its brand-new appearance.
You want to buy a property at a very low price. Then you need to put in some time, a strict amount of budget, and enough manpower. Then the end goal is to sell it at a high price. Here the focus should be on the speed of the renovations rather than the most profit.
This plan also covers what house flippers call the 70% rule. This rule means the investor pays no more than 70% of the after repair value or the ARV. The ARV is the worth of the home after it is fully renovated.
For example, if the projected ARV is $150,000 and then total amount of projected renovation is $25,000. The 70% rule means that the investor should pay no more than $80,000 for the property. So imagine paying less than $40 for a 20ft steel shipping container? The profit can be huge.
So if you talk about a property with a very low price, by thinking out of the box, why not look for alternative spaces that can be turned into a house? Making a budget, then creating a team is a good next step. Then in terms of speed, allow your team 7 days to get the job done. Then expect good results and better profit.
So here are some practical tips on how to start an uncommon house flipping business:
#1 Limit the financial risk
In this case, using the 70% rule can be fully applied. This will limit your spending and remind you to stay on budget. So the key is to stay on a very strict budget. Otherwise, should you go over the budget, then the limitations you have set in place can be used as a window to move your ARV.
After the project is done, you can work with a reliable property management company that will help you find potential buyers. This will assure you guaranteed profit as well as ease in doing business.
#2 Think Out of the Box
The goal is to transform dilapidated and atypical structures into comfortable and luxurious dream homes. A good example is buying a 20ft and 165 square feet steel shipping container. Using your imagination, since the container doors are typically 8 and a half feet wide, you can put a double-wide front glass door.
And just like the original container doors, they can be opened at 180 degrees. Then to give the illusion and feel of a wide space, with an entire length of 165 feet, you can put 11 glass windows to let the sunlight in during the daytime.
You can put a living room with a small couch on one end, then put a queen-size murphy bed that folds down and becomes your bed at nighttime. The other end of the container can be your bathroom with a sliding door made out of a barn door. And between the living room/bedroom and the toilet can be a long granite countertop.
With one side to serve as your dining area, and the other side can be your kitchen with a sink, an oven, and other amenities. Of course, it is important to maximize the vertical space for storage. Then put a mini-split air conditioning and you are all set to sell a comfortable luxury home that used to be a container.
There are many more ideas that can follow once you start doing this. How about flipping a storage tank? Or a trailer truck? Or an old school bus? The list can go on and on. But the bottom line is you do something that is fun, fulfilling and money-making as well.